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    Published on: October 4, 2007

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    http://www.morningnewsbeat.com/Radio/Radio_Listen_S.las

    Or, to simply read the commentary in text form, continue below…



    I’m Kevin Coupe, and this is MorningNewsBeat Radio, brought to you by Webstop, experts in the art of retail website design.

    It has been a tough week for a certain class of baseball fan, namely those of us who live and die with the wins and losses of the New York Mets. For the final two weeks of the regular season, it was mostly losses and dying, resulting in a collapse that has been described with adjectives that I’m already tired of. Can we, just for a little while, dispense with the use of words like “monumental” and “staggering”?

    There has been a lot of discussion in the New York media about whether the Mets’ demise was the result of a lack of character or a lack of talent. My suspicion, and I’m hardly an expert on this, is that the Mets’ problems were a result of both.

    Certainly the team certainly didn’t have as much talent as we thought, in part because it had a pitching staff that was almost my age.

    But the character issue is one that I think we all can relate to. It has to do with a lack of a work ethic, and I believe that a strong work ethic generally will compensate for the occasional lack of talent. Hell, the fact that I have a career is practically a testament to that.

    In watching the Mets over the past few weeks, we all saw players not running to first base after they hit the ball. Players making dumb base running mistakes. Players fielding the ball lackadaisically, and then throwing to the wrong base or not hitting the cutoff man. In other words, making fundamental mistakes. Forget about the fact that these players are being paid salaries that are beyond belief. What matters more to me is that they are supposed to be professionals…and they didn’t act that way.

    Carlos Delgado, the Mets’ first baseman, said toward the end of the season that the tea was just so good that sometimes they get bored. That’s not my idea of a professional, nor of a person with a strong work ethic. And I think it is emblematic of the team’s bigger problems. Jose Reyes, the team’s supremely talented shortstop, played like his head was in the clouds…or someplace else. Again, not professional. And supremely disappointing.

    There’s a lesson here for all of us. We have to behave like professionals, and create a work atmosphere in which the people who work for us act like professionals. We have to engender a climate that prizes and rewards a dedicated work ethic, and raise our kids to understand how important this is.

    And here’s the final lesson. Always, always, run when you hit the ball. Because if you don’t, nothing good will happen. If you do, however, there’s always the possibility of a hit, a run and even a win…and the possibility of keeping the season alive.

    For MorningNewsBeat Radio, I’m Kevin Coupe.
    KC's View:

    Published on: October 4, 2007

    A Pennsylvania judge has ruled that Wal-Mart, which last year lost a class action suit there that claimed it forced employees to work off the clock, now will have to pay the victorious employees $62.3 million in damages. The award is in addition to the $78.5 million already awarded to the plaintiffs by a jury in the case when it was decided last year.

    “By this statute the legislature created significant financial incentives for employers to pay workers all the money they've earned by their hard work," Philadelphia Common Pleas Judge Mark Bernstein wrote, saying that "the law in its majesty applies equally to highly paid executives and minimum wage clerks.”

    However, nobody is getting any money just yet. Wal-Mart is appealing the verdict in the jury trial.
    KC's View:
    The problem for Wal-Mart, of course, isn’t just this case. It is the various other similar cases that Wal-Mart is dealing with at the moment, and the possibility that this is just the beginning of a tidal wave of decisions against the company.

    Published on: October 4, 2007

    Interesting piece in Forbes about how various companies are “going green,” in the sense that they are working to reduce the impact of their various operations on the environment. “Whether ensuring sustainable agriculture and seafood production, reducing the use of synthetic chemicals in favor of plant-based alternatives or teaching children about endangered animals through its products, some major American companies are doing their part to protect the environment,” the magazine writes.

    Examples cited include Adidas, Gap, H&M and Ikea, which “all support the Better Cotton Initiative. This group, which estimates that cotton consumes 11% of the world’s pesticides and 2.4% of arable land, encourages better cotton farming practices.

    Office Depot is another example: it has a “green book” that helps customers find the most environmentally friendly products in the store.

    And McDonald’s reportedly is using a scorecard to rate its various suppliers on their conservation efforts, and is taking business away from companies not living up to its standards.
    KC's View:
    Ironically, this story comes out just a week after a new study by Ipsos Reid said that 70 percent of Americans either “strongly” or “somewhat” agree with the statement that “green” advertising is just a marketing tactic, suggesting that there may be some cynicism in the marketplace about the whole notion of “going green.”

    Environmentally friendly practices may be one of those things that companies have to be careful about promoting, because they need to avoid appearing self-serving. Even a whiff of self-aggrandizement, at last around this issue, may be enough to put consumers off.

    It is one of the reasons that companies have to make a real and cultural commitment to the notion of being “green.” It can’t seem fake or ephemeral or like it is driven by marketing or political correctness. That’s why some companies – Whole Foods comes to mind – may have a built-in advantage here. And it’s why you have to admire Wal-Mart for making such an enormous commitment in this area – there really is no halfway to caring about the planet.

    I actually think that this is one of the reasons that canvas bags in supermarkets work so well. They actually put the onus on the consumer, both enabling and challenging the shopper to take up the cause in a way that seems small but, when combined with the efforts of others, could actually have some impact.

    Published on: October 4, 2007

    The Wall Street Journal reports that a federal judge in California has granted class-action status to a lawsuit that claims that Target is discriminating against blind shoppers by not making its website more accessible for their use.

    While Target apparently has made some changes to its site, the company continues to maintain that it lives up to all legal guidelines, and it says it will appeal the decision.

    The suit has been filed by the National Federation for the Blind under the terms of the Americans With Disabilities Act (ADA).
    KC's View:
    This is one of those lawsuits, you’ll excuse the pun, that most people probably would not have seen coming.

    But there it is. Not just a legal challenge to Target, but essentially a challenge to every retailer.

    Attention must be paid, as Arthur Miller once famously wrote.

    Published on: October 4, 2007

    Paul Butera, the chairman and CEO of Fresh Brands, parent company to Piggly Wiggly, has received approval from the board of directors to buy the 85 percent of the company that he did not already own. Terms of the deal were not disclosed.

    This is the second time the company has been sold in two years. Butera will own 26 stores, plus will oversee 69 franchised units.
    KC's View:

    Published on: October 4, 2007

    The Wall Street Journal reports that Procter & Gamble may be about to get out of the coffee and snack businesses, including the Folger and Pringles brands – though there is some debate about how close the company may be to an actual divestment.

    The Financial Times reports that P&G has hired The Blackstone Group to auction off the businesses, in addition to its Duracell battery business. But the Journal says that its sources say that Blackstone is only helping the company to evaluate its options.

    The Journal says that P&G is setting a goal for each of its business that would require them to achieve four percent annual, organic growth – and that Folgers, Pringles and Duracell are too slow-growth to make those numbers. Hence, a sale seems probable, if not inevitable.
    KC's View:

    Published on: October 4, 2007

    • Wal-Mart de Mexico announced this week that it has received all the necessary regulatory approvals to allow it to begin opening bank branches there, possibly as soon as next month. The new bank will be called Banco Wal-Mart de Mexico Adelante.
    KC's View:

    Published on: October 4, 2007

    • The Seattle Times reports that “Starbucks and the Industrial Workers of the World reached a settlement agreement this week over unionizing efforts by employees at a Starbucks store in Grand Rapids, Mich.” While the coffee company admitted no wrongdoing and won’t have to pay any fines, it did agree to post notices in its store there for two months that advise employees of their unionization rights.
    KC's View:

    Published on: October 4, 2007

    • Kent Moore, the CFO at Bruno’s Supermarkets, has been named the company’s new CEO. He succeeds David West, who is becoming the company’s chairman.
    KC's View:

    Published on: October 4, 2007

    We had a story yesterday about a Wall Street Journal piece arguing that the “Wal-Mart era” may be coming to an end, and a number of people wanted to weigh in on it.

    MNB user Chris Benzon wrote:

    I don’t think any healthy retailer would ever believe the war is over or rest on their laurels – regardless of who the competition is (rest assured Wal-Mart is not resting or dead).

    A couple of years ago, almost without exception, any time I met with a Customer the conversation touched at some point about Wal-Mart, either directly or indirectly but mostly directly. It didn’t seem to matter the retail category but definitely affected more by the grocery segment than any other. Can’t say that the same is true today. Yes, ‘Wal-Mart’ comes up but not as frequently. From what I’ve seen, most retailers either have found there point of differentiation and continue to exploit it, are focused on their own processes and brand, have found benefit in having Wal-Mart around (I’ve talked with several retailers – several categories including grocery – that have told me some of their most profitable stores are the ones closest to a Wal-Mart!), or maintained their vigilance but never really felt threatened by Wal-Mart.

    Over the last year Wal-Mart hit a few bumps. PC image challenges: employee pay, health care, discrimination cases. Trying to show their ‘green side’, offering organic foods, changing lighting and selling liquid dish detergent (at least they’re trying). RFID flop. But I think one of the biggest bumps was the instability of their advertising leadership at the same time their attempt to change their branding and marketing approach to reach a broader audience. They messed with and lost some of their ‘base’.

    Oh yeah, least we forget the Internet. Did the internet really change shopper’s preferences? Or do shoppers have preferences and use/change the tools, mediums and shopping experiences that more effectively align with those preferences?

    One thing is for sure; the conversations about Wal-Mart continue and will for some time to come.


    MNB user Albin H Andolshek II wrote:

    Most retailers' are still asleep at the wheel and it's funny how you fail to mention Walmart.com and the fact that Walmart.com has a Chief Executive and the head of web marketing for Walmart.com eventually became the CMO of the organization! That's what's going on. Wal-Mart is beating up the market daily and we as customers must demand similar or better service at our local retail outlets. As companies grow it becomes more and more difficult to grow. It's a natural cycle, but don't think for one minute that Walmart has stopped planning. Please alert the world that to succeed, you need to take what Walmart has done and IS DOING and replicate the offering to consumers. In an interactive world, the customer is in control! Put the customer in control and you win. Target is the only worthy opponent to Walmart (imo) and other's need to get in the ring and put up a fight! NOW! before we lose competition which is what makes this country great.

    And now Tesco is jumping in the ring, which means the stakes are high...We shouldn't let what happened to the auto industry happen to the retail industry.


    Actually, I think the argument for the end of the Wal-Mart era is that a lot of retailers have proven to be worthy opponents to Wal-Mart, and have adapted better than many people thought.

    Another MNB user wrote:

    The numbers always tell the story. P&G, which used to highly tout Wal-Mart, has a decline to 15% of its sales while Wal-Mart is adding stores and changing things to be more competitive. That is a major change. Why? Is Wal-Mart shifting to secondary brands? Is P&G sensing other retailers are more “important”? Something is afoot. Stay tuned.

    MNB user Mark Hunter wrote:

    History always repeats itself. In the 1970's McDonald's was a juggernaut that people believed was going to take over the world and in time would be the only place to eat. Today, McDonald's has never been bigger but they are viewed as just another big company and not the dominant player they once were. Wal-Mart is in the same place McDonald's was 30 years ago, history always repeats itself.

    MNB user Mike Holcomb wrote:

    What Wal-Mart is experiencing is the "life cycle" that every business (in fact everything) goes through. Birth and death are just a fact of life and it is a fact with every business with one exception. In business, if you can recognize your impending death you have the possible option of rebirth by going back to the beginning and starting over with a new life cycle.

    The other reality is that things change and unless you can move with the change you are doomed. I believe that in some cases you can't change because of your past success and reputation. Wal-Mart changed the retail business forever but it was built on one thing - price. Like it or not Wal-Mart made everything cheaper. Not necessarily better, but cheaper. But life goes on and what the masses wanted yesterday is not what they want today. Nor is it what they will demand tomorrow. The issue for Wal-Mart and for everyone of us is can we recognize when we are "over the hill" and what are we willing to do to reinvent ourselves in a way that is relevant to today's (and tomorrow's) customer.


    One MNB user isn’t buying:

    It is very simple. If you desire inexpensive prices and quality or SERVICE is not you top priority, Wal-Mart is your place.

    This MNB user makes an excellent point:

    Most of these types of articles are written by people who rarely shop at Wal-Mart and when they do, it is under duress because they are writing an article . The basic Wal-Mart proposition of lowering a family’s cost of living for some or all of their needs holds true. There are millions of people who rely on those values and would have significant hardship if they had to go to a Target or Safeway instead. We’ve seen data that says Wal-Mart’s “problem” is that they have confused their core shopper. Excursions to the world of fashion and design may have said to their shoppers that it wanted to become “Target lite”. It is clear that Wal-Mart has rededicated itself to its core values. As we go into an economic slowdown and as Americans have lost their home equity “piggy bank”, Wal-Mart’s appeal of low cost goods should be very popular.

    MNB user Bob Vereen wrote:

    I've been studying and writing about retailing since 1950, and have watched Wal-Mart since 1978. While I greatly respect WSJ, I wonder if the author of that piece has
    traveled America, talked to the general public or looked at Wal-Mart parking lots, as my wife and I just did driving to and from New York during the past two weeks (I looked out of curiosity and because I'm a stockholder.)

    The story mentions discounters doing better--i.e., Target is the only one that survived as a strong entity. Kmart no longer is a threat. Specialty chains like Bed, Bath & Beyond and Best Buy thrive, but Circuit City and Linens 'n Things struggle.

    On our trip, I was in Wal-Mart stores in 3 states and found them all clean, busy, staffed with friendly people. Granted, with 4,000 stores (or whatever the number now is) and more than 1 million employees, things are not always going to go smoothly, but overall, when they set their minds on something, they can change an industry.

    I noticed yesterday that Target is now lowering more generic prices, thanks to Wal-Mart's leaderhsip.


    And still another MNB user wrote:

    What kept coming up in my mind were the competitive responses that Wal-Mart forced. Does any WM basher really think that these other companies would have changed on their own? As you always say, "Compete is a verb". Without Wal-Mart, would CVS and Walgreen's have decided to compete by adding basic health services to their stores? They didn't need to. But, in order to compete w/Wal-Mart, they had to give consumers a reason to pick them instead, and they did. So, whatever the bashers want to say, it's obvious that US consumers are the winners because Wal-Mart raised the bar. Thank you, Sam Walton.

    And another MNB user wrote:

    We should be wise to remember that nothing on this earth lasts forever - including Wal-Mart. Examples through the ages run from Rome to Woolworth. What was once the prize becomes the spoil. Why? The mirror becomes more important than the window. Meaning when the demands of the company are more important than the demands of the customer, then comes the downslide.

    This reminds me of the line from the supremely cynical Randy Newman song, “A Few Words In Defense Of Our Country”:

    The end of an empire is messy at best
    And this empire is ending
    Like all the rest
    Like the Spanish Armada adrift on the sea
    We’re adrift in the land of the brave
    And the home of the free…

    KC's View:

    Published on: October 4, 2007

    In first round Major League Baseball playoff action, the National League Divisional series began with the Arizona Diamondbacks defeating the Chicago Cubs 3-1, and the Colorado Rockies beating the Philadelphia Phillies 4-2. Over in the American League, the Boston Red Sox blanked the Los Angeles Angels 4-0.
    KC's View:

    Published on: October 4, 2007

    “Sustainability” has become an oft-used word in the food business, as everyone tries to figure out what their strategies should be when it comes to carbon footprints, climate change, and environmental consciousness. But what does the consumer think – and know – about sustainability? And how should companies market to these concerns?

    These are just a few of the issues that will be discussed during a unique webinar co-hosted by The Food Institute and The Hartman Group, scheduled for Wednesday, October 10, at 2 pm EDT.

    This is a must-attend event, because sustainability has become an increasingly critical touchpoint for consumers, and retailers need to determine how to speak, listen and act in this changing environment.

    It’ll take just 45 minutes. But the illumination it will provide will last a lot longer.

    For more information, go to:

    http://www.foodinstitute.com/sustainability.cfm
    KC's View: